Dear Shareholders,
 
 Affordability is at the epicenter of the global healthcare debate and
 it is clear that drug innovation and therapy cost must interact
 effectively in a new financial matrix. Biocon''s business strategy of
 delivering affordable innovation is well aligned with this emerging
 paradigm.
 
 During the year, Biocon continued to tread the path towards its mission
 of lever- aging India''s cost effective innovation base to deliver
 affordable drugs for chronic diseases in global markets, through
 strategic research and marketing partnerships.
 
 Over the past decade, Biocon''s biopharmaceutical business has evolved
 to a size and scale that is poised to address global opportunities. We
 have also shaped our business into five clear growth verticals with
 specialized and dedicated resources that can help us attain focus and
 deliver value. These business segments have been derived from our core
 technology platforms that have differentiated us in the marketplace.
 
 They are:
 
 1.  Small Molecules
 
 2.  Biosimilars
 
 3.  Branded Formulations
 
 4.  Novel Molecules
 
 5.  Integrated Research Services
 
 Moving ahead, we are investing in augmenting our manufacturing,
 research and marketing base in order to pursue strong and sustained
 growth. This includes our first overseas manufacturing facility in
 Malaysia, our new state-of-the-art research center in Bangalore and a
 number of marketing alliances in several emerging markets.
 
 The year under review also saw the dissolution of our global
 partnership for Biosimilar Insulin and Insulin Analogs with pharma
 major, Pfizer. A change in priority within Pfizer''s biosimilars
 division led to a preference for in house biosimilar programs that were
 perceived to deliver higher returns. This led the two companies to
 reach an agreement for amicable parting of ways which was believed to
 be in best mutual interest. In terms of business continuity, there will
 be minimal impact as Biocon will continue to develop its programs for
 global registrations as per plan, utilizing the retained payments
 received from Pfizer. We remain committed to our commercialization
 endeavor, albeit on a different path that will shift from a single
 global partner to multiple regional alliances.
 
 Biosimilar Insulin and Insulin Analogs occupy a large segment of
 biosimilars, globally. Our Biosimilar Recombinant Human Insulin is
 already well accepted in several emerging markets, where we have strong
 alliances that pre-date our partnership with Pfizer. We are confident
 that we can carve out a sizeable and profitable share of the US$ 17
 billion global insulin''s market in the years ahead.
 
 We expect to extend our relationships with existing regional partners
 and forge new alliances in other markets.
 
 Small Molecules
 
 Biocon has been reaping rich rewards from its Small Molecules business
 which comprises a robust portfolio of Active Pharmaceutical Ingredients
 (APIs), including generics like Stations, Immunosuppressant''s and
 Proprietary Products like Fidaxomicin.  Recognizing the vulnerability
 of APIs to commoditization, we are entering the next phase of growth by
 developing and marketing finished formulations. We aim to move up the
 value chain, through 505 (b)(2) and ANDA filings.
 
 Biosimilars
 
 The Biosimilars opportunity is set to expand as patents expire on
 leading biologics and patients demand lower priced drugs. A number of
 top selling biologic brands, including Herceptin®, Enbrel®,
 MabThera®, Remicade® as well as Insulin Analogs like Lantus®,
 Humalog® and NovoLog® are due to lose product patent protection over
 the next 5-7 years, opening up a wealth of new possibilities for
 biosimilars players. Key therapy areas such as cancer, diabetes and
 rheumatoid arthritis will spearhead this new wave of biosimilars.
 
 Biocon is well placed to leverage many of these opportunities. Our
 Insulins portfolio will enable us to strike a sizeable share of the
 biosimilar insulins market, which is expected to reach US$ 20 billion
 by 2020. Our Biosimilar Monoclonal Antibodies programs focusing on
 oncology, rheumatoid arthritis and other areas, will give us additional
 foothold in these chronic segments.
 
 We have already begun unlocking value in emerging markets with our
 Biosimilar Recombinant Human Insulin where we are represented in over
 30 countries through various regional marketing alliances. With the
 growing incidence of diabetes the world over, this will potentially
 expand the global market even further Biocon is well positioned to
 address this large opportunity with the advantage of being
 ''affordable''.
 
 Branded Formulations
 
 Branded Formulations have helped energize the Company not only in terms
 of earnings but also in creating brand equity. This is an India centric
 business and several Biocon brands are amongst the top five in the
 domestic market. The Indian pharmaceuticals space is set for exciting
 times with the market expected to attain a size of over US$ 50 billion
 by 2015.
 
 In less than a decade, Biocon has made a strong entry into the Indian
 market with over 70 brands across six disease segments: Dialectology,
 Oncotherapeutics, Nephrology, Cardiology, Immunotherapy, and
 Comprehensive Care. We are committed to building market and brand
 leadership through product differentiation and personalized medical
 support.
 
 I am pleased to state that Biocon is now India''s premier Insulins
 Company, registering the fastest pace of growth in the insulins
 sector. Whilst we have seen robust growth in the vials segment thus
 far, the recent introduction of an innovative device INSUPen® has now
 spurred growth in cartridges as well. INSUPen® has been positioned to
 augment patient compliance and convenience. Our six months sales
 numbers reflect good acceptance of this new product offering.
 
 In Oncology, our proprietary anchor product BIOMAb EGFR® which has the
 distinction of being the first novel biologic to be developed in
 India, has revolutionized the treatment of head and neck cancer.
 Recently concluded clinical trials will now enable label extensions to
 new indications such as glioblastoma and non small cell lung cancer.
 Over 5,000 Indian patients have benefited from this life saving drug.
 FY 12 saw the completion of one year of market introduction of the
 first and only global generic version of everolimus from Biocon.
 Branded Evert or™, this life saving cancer drug used in the treatment
 of neuro-endocrine tumors of pancreatic origin, has benefited over 400
 patients. Biocon has also provided affordable access to this drug which
 was previously beyond the reach of most Indian patients.
 
 Biocon''s Nephrology division continues to forge ahead with its well
 balanced portfolio of products for dialysis and transplant patients,
 with most brands featuring amongst the top three. The dialysis market
 is experiencing unprece- dented growth through the establishment of
 branded chains of dialysis centers across the country. This is expected
 to expand the market for our leading erythropoietin brand, ERYPRO.
 
 Novel Molecules
 
 Bringing path breaking proprietary products to global markets is
 Biocon''s long cherished objective. As drug development becomes an
 expensive, high risk endeavor, we are leveraging our robust R&D engine
 to deliver affordable innovation. Biocon''s global competitive edge
 rests on its high quality talent, process innovation, and high value
 licensable research assets. We will take our most promising novel
 molecules to proof-of-concept before exploring partnerships.  Biocon''s
 two late stage candidates include an Oral Insulin molecule (IN-105) and
 Itolizumab (T1 h) - an anti-CD6 MAb for autoimmune conditions which has
 completed a phase III psoriasis trial with compelling data that
 profiles it as an attractive licensable asset. Closely following these
 programs into the clinic are BVX-20, an anti-CD 20 bio-better
 monoclonal antibody that has shown encouraging results so far; and our
 partnered program with Amylin Pharmaceuticals for AC165198, a Phybrid
 which has dual pharmacology addressing diabetes and obesity, currently
 in phase I clinical trials under a US FDA IND.
 
 Integrated Research Services
 
 FY 12 has been one of the strongest years in Syngene''s history. The
 strategy to invest in strengthening our scientific team and capability
 platforms in discovery and development has allowed us to build
 stronger, more integrated and value creating collaborations to support
 our customers. The solid progress we have seen this year by employing
 this strategy is also reflected by the encouragingly high levels of
 customer retention and expansion, in terms of both scale and scope of
 activity.
 
 Additionally, this has also provided us the ability to attract new
 customers.  Supporting this growth, our team of scientists has grown
 from 1,300 to over 1,600 and is now the largest team of scientists in
 life sciences in India. Along with expansion in our customer base, we
 are also seeing an accelerating evolution in the nature of our customer
 collaborations through high value addition. It has been an encouraging
 year of consolidation and investment in our underlying service
 capabilities which enables Syngene to continue its growth trajectory,
 going forward.
 
 A recent highlight is the establishment of The Abbott Nutrition R&D
 Center at Syngene, a clear endorsement of the success of our Integrated
 Services model.  We expect to enroll other dedicated research hubs in
 the future.
 
 Preparing ourselves for the Syngene IPO, we have taken the first step
 of making Clinging a subsidiary of Syngene. We plan to move further
 based on appropriate market conditions as advised by our consultants.
 
 Our innovation strategy is based on collaborative R&D aimed at
 maximizing out- comes through shared risk and reward, whilst delivering
 affordable innovation.  Biocon''s R&D effort has created a robust
 pipeline of Small Molecules, Biosimilars and Novel Biologics which
 promise sustained high value growth.
 
 Taking this forward, we recently inaugurated Biocon Research Center, a
 state-of- the-art integrated Biotechnology R&D Center which has a
 mandate to be the ''center of excellence'' with a multi-disciplinary
 ecosystem for conducting research.  Spread over 2,00,000 sq. ft., this
 research facility encompasses labs for molecular biology, biologics
 process science, formulations development, molecular character-
 nation, functional bioassays, and preclinical and clinical development.
 
 Through Biocon Foundation, we aim to make a difference to the life of
 the communities we serve. Our integrated healthcare initiative spans
 preventive, primary, secondary and tertiary healthcare programs. In the
 area of education, our focus is on the quality of primary education
 delivery During the year, our nine Arogya Raksha Primary Care Clinics,
 meted out medical consultations to over 60,000 patients. We plan to
 open six more clinics this year and start several new healthcare
 initiatives. Our key activities last year included an oral cancer
 screening program and a series of training programs for health workers
 in chronic disease management.
 
 Under our Micro Health Insurance Scheme, Arogya Raksha Yojana, we
 enrolled nearly 1,00,000 people in Karnataka. In the area of education,
 our Math Work Books Chinnara Ganitha have greatly enhanced the
 mathematical skills of students in rural schools. We now print 80,000
 books which are distributed in primary schools in eight districts of
 Karnataka.
 
 I am also pleased to inform you that our rehabilitation efforts
 extended to flood victims of Bagalkot district in Karnataka, has seen
 us build over 400 houses which will be supported by a
 health-cum-community center and a primary school in the village. Going
 forward, we plan to provide solar lighting to every household as a part
 of our endeavor to offer a sustainable solution for electrification.
 
 FY 12 has been an eventful year with good progress across our
 businesses. At Group level, we have delivered 16% Revenue growth driven
 primarily by Research Services and Branded Formulations. Our Research
 Services business showed a robust 29% revenue growth from Rs 3,177
 million to Rs 4,101 million this year, and our Branded Formulations
 business grew by 39% from Rs 1,863 million to Rs 2,594 million in FY 12.
 Overall, our EBITDA and PAT margins have been delivered at 27% and 16%
 respectively. Our Net Cash position further improved to Rs 7,327
 million, against Rs 4,908 million at the end of last fiscal.
 
 The benefit of licensing income to our PAT was sharply down to Rs 390
 million this fiscal from the exceptional levels recorded last fiscal of
 Rs 990 million. However, improvements elsewhere maintained total PAT at
 near last year''s level. Going for- ward, our development expenses for
 Insulins program will be set off against the retained payments we have
 received from Pfizer We have seen exceptional growth in our Research
 Services business, an outcome of the strategic investments we have made
 over the last two years in enhancing our integrated service offerings.
 
 It is with great sadness that I share with you the news of the demise
 of Dr. Neville Bain, Non-Executive Director and Chairman of the Audit
 Committee, on May 22, 2012. Dr. Neville Bain joined the Board of Biocon
 in 1999 and played a key role in building high standards of Corporate
 Governance and Financial Reporting for Your Company. His contribution
 and commitment to Biocon will be cherished for years to come. On behalf
 of my Board and all my colleagues at Biocon, we express our deepest
 condolences to his wife and family Over the past year, Biocon has built
 on its core strengths and leveraged its growth drivers to ensure a
 profitable future for Your Company. As we move forward, we will out
 license our assets to unlock value. We will leverage our Research
 Services with differentiated offerings. Our focus on emerging markets
 through regional partnerships, we believe, will help us further
 stimulate this growth momentum.  We will continue to enhance our brand
 equity in domestic markets and in select emerging markets.
 
 Finally, I would like to thank Team Biocon for its dedication, support
 and tireless efforts in building Biocon. I also thank all our esteemed
 shareholders for their continued support and for partnering us in our
 mission to make a positive impact on global health.
 
 Thank you.
 
 Yours sincerely,
 
 Kiran Mazumdar-Shaw Chairman & Managing Director June 5, 2012